Foreign Correspondence

[Amaunet]

Fresh Scramble For Africa's Oil

Posted by Akanimo Sampson on Wednesday March 24, 2004 at 6:05
AKANIMO SAMPSON BUREAU CHIEF, PORT HARCOURT

FRESH SCRAMBLE FOR AFRICA BY MAJOR OIL FIRMS

AFRICA has become a big draw for most major and supermajor transnational oil corporations currently in desperate need for new sources of oil and gas.

Competition is increasingly becoming hotter as state-owned firms such as China National Petroleum Corporation (CNPC), Malaysia’s Petronas, Norway’s Statoil and Brazil’s Petrobras seek to plant themselves more firmly outside their home turf.

Their focus is however, on the deepwater Gulf of Mexico, deepwater West Africa and the north Caspian, where they believe are capable of yielding huge funds.

Daily Independent findings in Port Harcourt, the Rivers State capital, showed that frontier provinces such as off-shore Mauritania and east Africa are increasingly on focus. China, Malaysia as well as India’s Oil and Natural Gas Corporation (ONGC) are said to be keen on building positions in Sudan.

It was further gathered that ‘pariah’ states such as Iran, Iraq, Libya, Myanmar and Syria and Latin American states such as Ecuador and Peru, are increasingly being targeted.

However, the deepwater Gulf of Mexico still dominates the areas of interest to the majors, with a string of new discoveries last year. Angola’s deepwater on the other hand, has faltered somewhat,, although disappointment in the ultra-deep was partly mitigated by three small finds in 2003 on BP’s Block 31.

It is being expected that momentum would pick up again this year, with ExxonMobil’s Bavuca-1 discovery, the 17th find on Block 15, proving a good start.

Oil industry watchers are however, claiming that the desperate need for new sources of oil and gas by the major players is driven by the reserves downgrade problem involving Shell./

While major oil companies are allegedly abandoning their production targets, BP and Shall at the moment are said to be shifting strategic focus toward building long-term “legacy” position. ENDS.

AKANIMO SAMPSON BUREAU CHIEF, PORT HARCOURT

UPSTREAM SPENDING: STATE-OWNED FIRMS OVERTAKE SHELL, CHEVRON, OTHERS

NATIONAL oil corporations and privately owned companies are now driving upstream spending, going by the out of a survey carried out by Citigroup, an investment bank.

Going by the survey, spending by Shell, Chevron Texaco, ExxonMobil, Total, ConocoPhillips, BP, Amerada Hess, Marathon and Occidental, all rated as major oil companies, is expected to be flat at $49 billion (about N7.59 trillion).

Daily Independent gathered in Eket, Akwa Ibom State, where ExxonMobil holds sway that national oil corporations and independents are expected to drive upstream spending this year to $149 billion, some N23.09 trillion.

The majors are expected to plow cash generated from a year of $30 per barrel of oil into gaining access to existing reserves, targeting major resource holders. Russia, from the outlook painted in Eket, is pegged to receive a chunk.

Well-informed insiders say ExxonMobil has $13 billion, around N2.01 trillion in cash at the moment, believed to be burning a hole in its pocket.

Russia is said to be set to attract $1.3 billion (about N201.5 billion) in upstream spending this year from TNK-BP and $4.00 billion, some N620 billion from ExxonMobil and Shell on Sakhalin 1 and 2.

While major Western oil companies are believed for now, to be staying clear of the chaos in Iraq, there are no signs that even the long delayed Kuwait opening is making any headway.

Interest in the other major resource holder, the Middle East, is being described as lukewarm. For Nnimmo Bassey, Chairman of Oilwatch Africa, a non-governmental organization, “this reflects the increased risks that followed the war in Iraq and the region’s unattractive terms.”.

According to Bassey, who is also the executive director of Environmental Rights Action (ERA), the Nigeria’s wing of Friends of the Earth International, “Qatar is an exception, with its gas monetization projects spurring huge interest from ExxonMobil, Shell, Total and South Africa Sasol.”

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